We exploit the fungus Neurospora crassa to elucidate the control and function of DNA methylation, an pigenetic process required for X chromosome-inactivation, genomic imprinting and normal development in mammals. In humans, loss of a DNA methyltransferase (MTase) causes ICF syndrome, loss of the methyl- DNA binding protein MeCP2 causes Rett syndrome and abnormal methylation is associatedwith cancer. . Isolation of Neurospora mutants defective in DNA methylation (dim) has led to insights into the control and function of methylation in eukaryotes. For example, our identification of DIM-5 as a histone H3 MTase demonstrated for the first time that histone modifications can control DNA methylation. Our work is helped by valuable resources including: 1. the sequence of the Neurospora genome, 2. efficient methods to knock out genes in Neurospora, S.epitope tagging systems for localization and biochemical studies, 4. antibodies specific for modified histones and other relevant epitopes and 5. powerful analytical methods (e.g., mass spectrometry, chromatin immunoprecipitation and microarray analysis). Most of our effort will go towards identifying and characterizing gene products involved in DNA methylation. We will identify mutants defective in silencing methylated DNA using both forward and reverse genetics. The latter will take advantage of the genome knock-out project, which will disrupt most Neurospora genes within the next few years. We will test all knock-outs for de-repression of our silenced bar gene. We will also employ a biochemical approach to identify protein(s) that trigger de novo methylation based on our identification of sequences that trigger DNA methylation in vivo. In other work, we will elucidate the function, mechanism and interrelationships of histone modifications associated with methylated DNA. We will determine which gene/protein is responsible for each observed histone modification in this fungus and test the phenotypes of mutants unable to perform the modifications. We also will determine the extent to which the histone modifications depend on each other. In addition, we will characterize the Neurospora 'epigenome'in wildtype and mutants using a 'ChlP-on-chip' approach with stock and custom microarrays and will use proteomics to investigate whether critical histone MTases are in protein complexes. Finally, we will follow up our observations suggesting that histone demethylases influence DNA methylation.